Great question i found over at Quora. For those of you who have never been, it is a Q&A site with standards – a higher class version of yahoo answers.

So here is one Ross Greenspan’s answer:

“Short Answer: Yes, many sectors in agriculture are primed for serious disruption.

Long Answer: The agricultural sector is primed for disruption on multiple levels but there are some important factors that limit the potential within the current regulatory framework.

We know that monoculture industrial farming is a doomed model of production. The process degrades the environment and leaves soil sterile. The input costs of petroleum fertilizers and pesticides also pose economic challenges to the industrial models profitability.

Currently, the regulatory environment policed by the USDA and FDA place draconian and crucially, uniform, obligations on all agricultural producers. There are restrictions and regulations at every level of production. This is claimed as food safety but mainly acts to calcify the competitive landscape and limit competitors in the major spaces (grain production, beef production and processing, poultry production and processing). The most egregious example to date has to do with raw milk regulations; an absurd restriction that limits consumer choice and provides no public safety mechanism because most raw milk sales are farmer to consumer. If a consumer gets sick, they will censure the farmer by no longer patronizing them – irregardless of government involvement.

The only way to keep out the way of these regulations for farmers is to stay a very small producer. For example, most states have exemptions for poultry producers to slaughter >10000 chickens/year and sell them to direct to consumer (like farm pick-up) without having to take them to a state or USDA-inspected slaughterhouse. This is how Polyface Farms sells their chickens w/o slaughtering at a USDA-inspected facility. To sell at a farmers market, for example, whether it’s 10 birds or 10,000 they must be slaughtered at an inspected facility or the farmer faces severe fines or even prison.

Regulation is the major factor limiting innovative agricultural enterprises from growing organically with market demand because of the bureaucratic restrictions that enforce inspections and certifications. These regulations make scaling the enterprise too costly.

The Internet has potential for disruption because it offers agricultural entrepreneurs a way to market and network like never before. I can research Community Supported Agriculture share programs that are local to my area. I can order special straight from the farmer. I can hear from current and previous customers about quality, quantity, etc. I can do this without ever visiting the farm or meeting the farmer in person. Although, personally, I like to do both. The Internet is the key tool for ag-trepreneurs to build a base of customers and to manage demand and scale dynamically.

On the production level, the innovations are mainly in low-energy, low-input production. “Sustainable agriculture” and organic agriculture is tackling this market niche. However, because of scale, it remains a niche. As costs of fossil fuel inputs rise, low-input farming becomes economically competitive but only for certain products and typically only at the local market level. Farmers can somewhat compete on price when they strip out the costs of transportation. Refrigerated transport of low-input crops defeats the purpose as refrigerated transport is highly intensive.

The bottom line is that we need more than disruption in the agricultural sector, we need a complete overhaul of food production and land distribution. We also need a complete rewrite of food safety laws to allow small producers that sell direct to consumer the leeway to scale. As stated, food safety laws mostly work to entrench corporate agriculture’s competitive position at the expense of small producers.

In the near future, as a result of Peak Oil, food will once again be grown closer to the end-consumer as it was 100 years ago. The transition will require us to maintain current rates of food production (extremely difficult w/o fossil-fuel inputs) and create effective distribution to eliminate waste. This can only be done by giving small farmers access to land and freedom to experiment”